3 Top Tips for Selling Your Business

Jan 29

3 Top Tips for Selling Your Business

For many business owners selling your business means realising your most valuable asset. Before selling, make sure you are adequately prepared. This means preparing a comprehensive business profile or information document. This document should have as much information as possible, including the history of the business, its clients and operating systems. It’s an incredibly important decision and one that should be done with careful consideration; you cannot afford to make a mistake. Take these tips into consideration.

1.    Find out your business’s value

The first thing you need to do is find out what the business is actually worth. There are a number of different business valuation methods you can use to determine the right price. However, you cannot use one approach alone. You need to factor in economic trends, the current market and what other similar businesses for sale are going for.

When you know the value, you need to start working towards planning a sale. This should be done while you and the business are healthy and vibrant. At this point, this is a good time and a reason to sell. If you are in a bad financial place, burned out or running out of money, you should consider other avenues first before selling.

2.    Have your financials in order

When it comes to selling your business, you need to put your best foot forward. This means you need to show potential buyers the business in the most positive and correct way possible. This includes balance sheets, your tax position and assets and liabilities. All these should be clean and ready to review.

An audit of your business records is especially important. You wouldn’t buy a business without this information, so why sell one without it.  Audits will provide you with extensive verification and confirmation of your information and performance. This can be helpful to you and prospective buyers.

3.    Consult a professional

Professional help will save you time, provide objectivity- as they are not emotionally involved, create many options for you to choose from and create a buffer between you and the potential buyer. This makes it easier to negotiate a contract without getting too personal.

A good business broker will assist you determine the most realistic price for your business. They can also identify and quality suitable buyers, they have expertise in putting together a good sales prospectus, negotiate the terms n your behalf and their livelihood depends on confidentiality, so you know your information will remain safe. Preparing for this sale requires a lot of research and persistence on your part. So, make sure you are mentally, financially and emotionally prepared for this business decision.

Selling a business is an arduous task and can take up to a year to finalise. While you are looking for a buyer, you should continue stay in business. Since you don’t know how long it will take to sell. It’s also a good opportunity to push a little harder in those months to increase profits and bump up the selling price.

 

This is a guest post from Tom at Intelligent Business Transfer